Site Search Navigation

Site Navigation

Site Mobile Navigation

G.E. Chief Executive Issues Ill-Advised Response to Bernie Sanders

By Elizabeth Williamson April 7, 2016 5:58 pmApril 7, 2016 5:58 pm

Photo

Bernie Sanders.Credit Eric Thayer for The New York Times

Gee, G.E.

After Bernie Sanders singled out General Electric’s tax avoidance and extensive overseas operations as an example of corporate “greed” and “selfishness,” Jeff Immelt, G.E.’s chief executive, penned a long, snarky op-ed for The Washington Post that went beyond defending the company, and appeared to take sides in the Democratic nominating contest. His comments were particularly unseemly on the eve of hotly-contested primaries in New York and Connecticut, G.E.’s corporate home bases.

General Electric was created in this country by American workers and American consumers. What we have seen over the many years is shutting down of many major plants in this country. Sending jobs to low-wage countries. And General Electric, doing a very good job avoiding the taxes. In fact, in a given year, they pay nothing in taxes. That’s greed. That is greed and that’s selfishness. That is lack of respect for the people of this country.

Asked “how does that destroy the fabric of America?” Mr. Sanders issued a broader condemnation:

I’ll tell you how it does. If you are a corporation and the only damn thing you are concerned about is your profits. Let’s just give an example of a corporation that’s making money in America, today, but desiring to move to China or to Mexico to make even more money. That is destroying the moral fabric of this country. That is saying that I don’t care that the workers, here have worked for decades. It doesn’t matter to me. The only thing that matters is that I can make a little bit more money. That the dollar is all that is almighty. And I think that is the moral fabric.

G.E.’s controversial tax avoidance strategies, its shedding of domestic jobs and its heavy reliance on political lobbying to get what it wants have been well-documented. That, and Mr. Sanders, clearly got Mr. Immelt’s goat.

“G.E. has been in business for 124 years, and we’ve never been a big hit with socialists. We create wealth and jobs, instead of just calling for them in speeches,” Mr. Immelt wrote.

In a story headlined “G.E.’s Strategies Let It Avoid Taxes Altogether,” part of the New York Times’s 2012 Pulitzer Prize-winning series “But Nobody Pays That,” David Kocieniewski wrote that G.E. “has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

“Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.”

When Elizabeth Warren was running for Senate in Massachusetts, she too said that G.E. pays no taxes. In his op-ed, Mr. Immelt wrote, “We pay billions in taxes, including federal, state and local taxes.” G.E.’s giant tax return isn’t public. The conglomerate doesn’t provide details on how much tax it pays to foreign governments, and how much to Uncle Sam.

“It’s easy to make hollow campaign promises and take cheap shots in speeches and during editorial board sessions, but U.S. companies have to deliver for their employees, customers and shareholders every day,” Mr. Immelt wrote. That line comes mighty close to Hillary Clinton’s criticism of Mr. Sanders.

Given the public anger G.E. has generated with its lobbying, Jeff Immelt should have kept his political views to himself — or at least waited until after tax season.